President Barack Obama, in a bid to restrain escalating costs for higher education, will call for tying federal financial aid to a new government ranking of college costs, graduation rates, and other factors, the White House said today.
The plan would rank colleges against their similar schools, and students who go to highly rated schools would get more aid than those lower on the list, the White House said in a fact sheet released in advance of the president’s bus tour of New York and Pennsylvania that starts today.
Obama is vowing to rein in spiraling tuition at a time when more than half of U.S. undergraduates rely on federal aid and student debt is climbing.
"Just tinkering around the edges won’t be enough," Obama wrote in an email this week to supporters. "To create a better bargain for the middle class, we have to fundamentally rethink about how higher education is paid for in this country."
According to the fact sheet, the Education Department would be directed to develop a rating system to be in place before the 2015 school year, and the president will ask Congress for legislation that would allocate financial aid based on those ratings by 2018, the White House said. While the administration could produce a ranking on its own, changes in federal aid would require congressional approval.
Obama has already called for giving more federal financial aid to colleges with moderate tuition increases and strong educational outcomes — such as high graduation rates — and yanking funding from those with the highest cost. That plan focused on expanding Perkins loans, a program for low-income families, and using the money as a lever to hold down costs.
The White House said the new ratings would be based on such measures as access, including the percentage of students receiving Pell grants; affordability, including average tuition, scholarships and loan debt; and outcomes, such as graduation and transfer rates, earnings of graduates, and graduates’ advanced degrees.
The federal government already gathers reams of information about colleges to develop such a ranking, and the administration has produced a College Scorecard, with data on cost and student debt.
Colleges have objected to such proposals in the past because of concern that certain institutions — and their students — would be unfairly penalized.
The government will have no trouble producing a ranking with the data it has available, said Terry Hartle, senior vice president at the Washington-based American Council on Education, which represents 1,800 college presidents.
"But it will be contentious" to figure out how to use it to provide aid to students, Hartle said.
As borrowers buckle under more than $1 trillion in student loans, Obama has repeatedly emphasized that higher education is the pathway to future prosperity for middle- and lower-income Americans.
The president's two-day bus trip will focus on restraining college affordability and will take him through parts of upstate New York and northeast Pennsylvania hit by the decline in U.S. manufacturing. Planned stops in Buffalo, Syracuse, and Binghamton in New York and Scranton, Pa., will mark the fourth in a series of campaign-style trips Obama has made outside of Washington since mid-July to promote proposals on housing, jobs, and education.
With members of Congress still on a monthlong break, Obama is seeking to control the public agenda before coming battles over the budget and the government's debt limit.
"What we're seeing here is not so much a chance to pass legislation, but setting the stage for the 2014 midterm elections," said Charles Franklin, a former political science professor at the University of Wisconsin-Madison and co-founder of Pollster.com. "They are issues that the president is staking out for himself and for Democrats."
In addition to linking funding to cost increases and outcomes, Obama has previously pushed for colleges to offer standard financial-aid award letters, so students can easily compare offers. A number of colleges, including the State University of New York system, have voluntarily signed on to that effort.
The administration also has proposed $1 billion "Race to the Top" college grants, modeled after an elementary and high school program that pushed states to agree to the White House's education agenda. Under the college version, states that promote affordability could win money.
Obama's choice of sites could give an indication of what he will stress. State University of New York Chancellor Nancy Zimpher was among the first universities to sign onto the administration’s "Know Before You Owe" financial aid initiative. The University of Buffalo and Binghamton University, both part of the New York university system, are two of Obama’s stops.
The SUNY system has among the higher graduation rates and lower costs in the country, said spokesman David Doyle. For the 2013-14 school year, the in-state cost of attendance, including room and board, is $22,700. The system is also developing an online initiative to grant online bachelor's degrees in three years and a master's in four, he said.
"We deliver affordable, high-quality education," Binghamton University President Harvey Stenger said in a telephone interview. "I believe we're doing the things the president wants to talk about."
Obama also plans to make remarks at Henninger High School in Syracuse and Lackawanna College in Scranton, where he is scheduled to be joined by Vice President Joe Biden.
Proposals from the administration and from lawmakers have yet to gain much traction in Congress, where the budget, the deficit, and the government’s borrowing authority have consumed much of the debate.
"This is all about the upcoming battle that’s going to be fought between him and Congress over raising the debt limit and sequester and all the other issues," said Eddie Mahe, a Republican consultant in Albuquerque, N.M.
In Obama’s email to supporters, he said he was on "a personal mission" to make colleges more affordable. The White House said there’s been a 257 percent increase in public four- year college tuition and fees during the last three decades, compared with an average 16 percent income increase for families during the same period.
People with a college education are more likely to be employed, the White House said. It published a chart on its website showing that unemployment in 2012 averaged 4.5 percent for people with a bachelor's degree and 8.3 percent for those with only a high school diploma.
June unemployment in Scranton was 9.5 percent, Syracuse 7.5 percent, Binghamton, 7.7 percent, and Buffalo, 7.4 percent. The U.S. unemployment rate was 7.4 percent for July.
The Rust Belt cities of Buffalo, Binghamton, Syracuse and Scranton all have median household incomes less than the U.S. median of $52,762 from 2007-2011, Census Bureau figures show.
The median income in Buffalo, a city of 260,000, was $30,230 during the period, according to Census Bureau figures. That compares with the state median of $56,951. Thirty percent of the population is below the poverty level, compared with 14.5 percent statewide.
© Copyright 2013 Bloomberg News. All rights reserved.